Category: California Employment Law

Although most companies protect against pregnancy discrimination, the EEOC has recorded an increase in claims between 2001, when 4,287 charges were made, and 2009, when 6,196 charges were made. The chart below illustrates the trend.

Q: I own a California business with 20 employees. A new employee, who I hired three weeks ago, just announced that she is pregnant. Do I need to provide a leave of absence to this employee?

The answer depends on the details. Because your business employs fewer than 50 employees, the pregnant employee is not eligible for 12 weeks of FMLA or CFRA leave. However, California’s Pregnancy Disability Leave, which covers employers with five or more employees, and has no prerequisite length of employment, does cover your employee.

Unlike the FMLA and CFRA, which do not cover employees until they have worked for the company for at least 12 months, and until they have worked at least 1,250 hours during the year before the start of leave, California’s PDL has no waiting period. Employees are eligible for the leave immediately upon hire.

If your employee becomes medically disabled on account of her pregnancy (i.e. she is unable to perform her job duties) then she may take leave during that period of disability, for up to four months of PDL leave. At the end of the disability period, if she is able to return to work you must guarantee reinstatement to the same position.

If the disability ends, and the baby is born, you won’t be required to provide additional time off for baby bonding because PDL provides disability leave only. Although CFRA provides for up to 12 weeks off for baby bonding, your company is not subject to that leave law.

Your employee may use any accrued paid time off to take care of the baby. Your company can also voluntarily offer unpaid time off for the new mother. She may also qualify for state wage replacement benefits from the EDD.

Q: I am a California employer with 60 employees. I have a pregnant employee in the warehouse who states that on her doctor’s advice she should avoid lifting more than 40 pounds. In her current position in order fulfillment she must lift 50 pound boxes and she has asked to move to an open position in shipping where she wouldn’t do any lifting. Do I need to transfer her?

Although the FMLA does not require a transfer to light duty, under the California law, an employer must transfer a pregnant employee to less strenuous or hazardous position, where based on advice of a doctor, and where the transfer can be reasonably accommodated.

Also, under the federal Pregnancy Discrimination Act (PDA) an employer should temporarily transfer a pregnant employee to light duty if the same right is available to other similarly non-occupationally disabled employees.

Here, your employee states that she cannot lift over 40 pounds. You are entitled to ask for medical confirmation of this restriction. Assuming lifting boxes is an essential part of her job, she cannot perform her duties. Since you have an open position which the employee is qualified to fill, it would be a reasonable accommodation to temporarily transfer her.

After the restriction is lifted, you should transfer her back to her original job.

In other words, employers should refrain from making employment decisions based merely on the fact that an individual hails from Mexico. For example, refusing to hire individuals of Mexican origin because of a belief that Mexicans may be ill with swine flu could run afoul of Title VII, not because of swine flu, but because of the nationality factor.

Presumably a neutral swine flu policy would pass muster. A neutral policy that requires any infected individuals, regardless of national origin, to take a leave of absence would probably not violate Title VII. The EEOC’s website would be more helpful to employers if it addressed appropriate neutral policies.

On the swine flu web page, the EEOC also cites the Americans With Disabilities Act (ADA). The EEOC does not expressly state, however, that swine flu would qualify as a disability under the ADA. Again, perhaps the EEOC could help employers by elucidating on this issue.

In most cases a temporary sickness such as the flu will not qualify as a disability. Nevertheless, the EEOC points to its publications addressing disability-related inquiries and medical examinations, as will as pre-hire questions and medical exams.

It is conceivable that employers could delve into medical issues in connection with victims of swine flu, say, perhaps, in connection with an FMLA or other leave of absence. As may be the case whenever employers address medical concerns, medical inquiries associated with swine flu cases should be handled with care. Keep the inquiries narrowly tailored to focus job-related issues. Avoid deviating into a general fitness for duty examination that might inappropriately evaluate disabilities. Avoid singling out protected classes. Maintain confidentiality.

As the nation’s attention is fixed on this topic of public health, the EEOC has appropriately suggested that EEO practices may be implicated. The substance of the comments are a little thin, doubtless due to the spontaneity of the outbreak. Perhaps the EEOC will develop guidelines in preparation for future outbreaks.

As the unemployment rate in California increased to 9.3% statewide in December 2008, the state agency responsible for administering unemployment benefits, the Economic Development Department (EDD) is overwhelmed. It has a significant case backlog and has drained the unemployment insurance fund.

As reported in the L.A. Times, “the state is paying out $30 million to $34 million a day in benefits. During the week of Jan. 5, its balance fell from about $500 million to $270 million.”

In December, reports the Times, California issued $1.1 billion in assistance checks to 429,000 claimants. Unemployed workers are eligible for payments of as much as $450 a week for up to 59 weeks.

According to the EDD, the UI Fund is projected to be in a deficit of $2.4 billion by the end of 2009. The UI Fund is projected to be in a deficit of $4.9 billion by the end of 2010 if changes are not made to the financing structure. The governor and legislature have been discussing increasing employers’ payroll tax contributions. This of course would not be good news for businesses already hit hard by the recession.

When the fund is depleted, the state will be forced to turn to the federal government for loans.

Meanwhile the EDD is overwhelmed by the volume of claims. “Millions of calls to state unemployment insurance processing centers continue to go unanswered,” reports the L.A. Times. “A 30-year-old computer system is overloaded, and stressed clerks are swamped by backlogged applications.”

The backlog is becoming a crisis, reports the L.A. Times. “Although the Unemployment Insurance Appeals Board is supposed to decide within 30 days whether the state wrongly denied an individual’s jobless benefits, less than 4% of complaints are finished by then, the U.S. Department of Labor says.”

In all, a record 68,135 appeals filed by out-of-work people and employers were awaiting action by the board as of Jan. 23.

“California takes longer to resolve unemployment appeals than any other state except Virginia, according to Labor Department data, and the federal government has demanded that the state come up with a plan to fix the mess this month.”

Governor Schwarzenegger’s plan to require state workers to take a two day work furlough each month is expected to exacerbate the problem.

Despite the backlog, employers should continue to promptly review employee claims to determine whether an application should be challenged, and if necessary, an award appealed. An employer has the right to appeal EDD’s decision to pay a claimant. An appeal must be submitted within 20 calendar days of the mailing date of the EDD’s Notice of Determination and/or Ruling.

During these tough economic times, as employees fall into debt, employers may see an increase in wage garnishments. Can an employer terminate an employee if the wage garnishments become a nuisance?

The answer is: “It depends.” Federal law, as well as California law, protects employees from termination on account of garnishment for “one indebtedness.” An employer is not restrained from taking adverse action against an employee on account of garnishment for more than one indebtedness.

<u>Federal Law</u>

In the federal Consumer Credit Protection Act, found in Title 15 of the U.S. Code, section 1674 prohibits an employer from discharging any employee by reason of the fact that his earnings have been subjected to garnishment for any one indebtedness. A willful violation of the section may result in criminal penalties, including a fine of up to $1,000, or imprisonment of up to one year, or both.

Although the federal act provides a criminal sanction as the only penalty for violation of the prohibition, some federal courts, including in the 9th Circuit have interpreted the law to allow an employee to file a civil lawsuit seeking back pay.

The term “one indebtedness” refers to a single debt, regardless of the number of levies made or the number of proceedings brought for its collection. A distinction is thus made between a single debt and the garnishment proceedings brought to collect it. A creditor, in seeking to collect a debt, may garnish wages on multiple occasions. Yet because the creditor seeks to collect a single debt, the employee would be protected by the federal law.

According to legislative commentary, if several creditors combine their debts in a single garnishment action, the joint amount is considered as “one indebtedness.” In the same vein, if a creditor joins several debts in a court action and obtains a judgment and writ of garnishment, the judgment would be considered a single indebtedness for purposes of this law. Also, the protection against discharge is renewed with each employment, since the new employer has not been a garnishee with respect to that employee.

<u>California Law</u>

The California Labor Code provides similar protection to employees. Section 2929 provides: “No employer may discharge any employee by reason of the fact that the garnishment of his wages has been threatened. No employer may discharge any employee by reason of the fact that his wages have been subjected to garnishment for the payment of one judgment.”

An employee discharged in violation of California Labor Code Section 2929 may continue to collect wages for up to 30 days after the date of termination.

California law is thus more explicit than federal law with respect to a private right of recovery. The legislative commentary associated with Section 2929 states that the civil penalty is intended to aid in the enforcement of the prohibition against discharge for garnishment of earnings provided by the federal Consumer Credit Protection Act of 1968. The civil penalty under Section 2929 benefits employees, notes the commentary, by providing a more effective method of securing compliance than the criminal sanction provided by the federal law.

Excessive garnishments may subject an employee to discipline. The legislative commentary observes: “Some employers have a rule that the employee will be given warnings for the first two garnishments and will be discharged for the third garnishment in a year. Where at least two of the actions relate to separate debts, discharge would not be prohibited by the law since the warning and discharge would be based on garnishment for more than one indebtedness.”

Employers should thus exercise caution before taking adverse action against an employee whose wages have been garnished.

In the midst of the California budget mess that pits Democrats against Republicans, Assembly Republican leader Mike Villines has published a list of demands to be met before GOP politicians agree to discuss new taxes. As reported by the Sacramento Bee, here, Villines has taken the position that Democrats have to capitulate to GOP demands for the 8-hour work day, meal breaks, looser environmental regulations, permanent budget cuts and a stiff spending cap, among other things.

The Bee quotes Villines: “We think you have to do these reforms first, cuts first and make sure that you’re doing an economic package that puts people back to work,” Villines said. “Then you have a discussion about revenue - and only then.”

The idea of revamping the National Labor Relations Act in favor of unions has been floating around for some time now, but legislation has stalled. No more. At the dawn of a new political regime, employers are bracing for monumental change.

Political analysts believe that Congress is likely to pass legislation titled the Employee Free Choice Act (“EFCA”) sometime in 2009, perhaps as early as the first 100 days of the new administration. The President-elect co-sponsored the legislation, and it is reasonable to expect him to sign it into law.

For those of you who have not been following the legislation, it is time to get up to speed. Generally, the EFCA would change labor law in three ways:

First, if enacted the law would require the National Labor Relations Board to certify a union after union organizers have gathered signed union cards from a simple majority of company workers. Currently, the certification process typically involves secret ballots where workers can vote without the union or employer eyeing their decision.

Second, after the card check certification, the EFCA would give the union and company 120 days to negotiate a new contract. If no agreement is reached, the union and company would be required to enter binding arbitration, where a government arbitrator would set the terms of the contract. Currently, if the union and company cannot agree to terms, the union may call a strike, and the employer may implement its last best offer or lock out workers, until eventually a compromise is reached.

Third, the EFCA would significantly increase penalties for unfair labor practices committed by employers during an organizing drive. Fines would rise to $20,000 per violation, and affected employees would be entitled to treble their back pay if terminated for participating in an organizing campaign.

The U.S. Chamber of Commerce has issued numerous statements in opposition to the legislation. “nions are now emphasizing the card check process in their organizing drives, not because they do not win secret ballot election—they win over 50—but because it eliminates any chances of losing. As an open-ended process, they can keep their campaign going as long as necessary rather than resolve the issue on a specific date as with an election. Not only are employees often targeted for intimidation, but the card check process also often leads to other coercive tactics, known as “corporate campaigns.” These campaigns are designed to pressure employers through demonstrations, false and misleading stories in news media, and other public expressions to recognize unions as the exclusive bargaining representative of their employees without having to go through an election. These tactics are how organized labor’s leadership intends to restore its declining membership base in the private sector.”

The Chamber adds: “In addition to its card check provisions, EFCA also contains a provision to impose mandatory interest arbitration of first contracts. Interest arbitration would set all the terms of the initial contract between an employer and a union, including wages and benefits, but also other provisions typically in collective bargaining agreements, such as outsourcing and union security clauses. While sometimes used in the public sector, binding interest arbitration is completely unprecedented in the private sector. The idea of government arbitrators determining contract terms and what business decisions must be taken to meet those commitments is simply beyond the pale.”

“Finally,” observes the Chamber, “EFCA includes provisions to increase penalties on employers for certain violations of the NLRA. The fact that these provisions apply only to employer violations and not to union violations illustrates the bias inherent in EFCA. Union coercion is no less contemptible than employer coercion.”

Organized labor, of course, has a completely different view. According to the AFL-CIO “Today, CEOs get contracts that protect their wages and benefits. But some deny their employees the same opportunity. Although U.S. and international laws are supposed to protect workers’ freedom to belong to unions, employers routinely harass, intimidate, coerce and even fire workers struggling to gain a union so they can bargain for better lives. And U.S. labor law is powerless to stop them. Employees are on an uneven playing field from the first moment they begin exploring whether they want to form a union, and the will of the majority often is crushed by brutal management tactics.”

“The current system is not like any democratic election held anywhere else in our society. Employers have turned the NLRB election process into management-controlled election process—the employer has all the power, controls the information workers can receive and routinely poisons the process by intimidating, harassing, coercing and even firing people who try to organize unions. On top of that, the law’s penalties are so insignificant that many companies treat them as just another cost of doing business. By the time employees vote in an NLRB election, if they can get to that point, a free and fair choice isn’t an option. Even in the voting location, workers do not have a free choice after being browbeaten by supervisors.”

In the nick of time for Election Day, below is a FAQ relating to the right of California employees to take time off for voting.

Q: Which employers are covered by this law?

A: All California employers.

Q: When is the leave available?

A: Employees are eligible for paid time off for the purpose of voting in any statewide election only if they do not have sufficient time outside of working hours to vote. The intent of the law is to provide an opportunity to vote to workers who would not be able to do so because of their jobs. The polls are open from 7am to 8pm. Most employees work shifts that would permit them to vote either before or after work, without taking any time off.

Q: How much time off must be given?

A: An employee is entitled to take off enough working time on the day of the election so that, when added to the voting time available outside of working hours, the employee will be able to vote.

Q: Is the leave paid?

A: Yes, but only a maximum of two hours is paid.

Q: Must the employee give advance notice?

A: Yes, usually. If an employee on the third working day prior to election day knows that he or she will need time off to vote on election day, the employee must give the employer at least two working days’ notice of the need for time off.

Q: Can employees take time off to vote in the middle of a shift?

A: No. Employers may require time off to be taken only at the beginning or end of the employee’s shift

Q: Must the employer post notice of the voting leave rights?

A: Yes. At least 10 days before any statewide election, every employer must conspicuously post a notice at the workplace (or, if impracticable, elsewhere where employees can see it as they come or go to the work site), setting forth the provisions of Election Code § 14000. Most employers simply leave the notice posted all year round. Some “all-in-one” posters include the proper notice among the multitude of other required postings.

As Election Day approaches, politics inevitably seeps into the workplace. What if employees become disruptive, argumentative, annoying, or just plain unproductive on account of politics in the workplace? Does an employer have the right to limit political activities of employees in the workplace?

The answer is: “It depends.” In the private sector, in some jurisdictions, it is unlawful for employers to prevent employees from engaging in political activities or affiliations. But that does not mean employees are free to engage in any kind political activity on the clock, in the workplace.

In California, for example, Labor Code Section 1101 makes it unlawful for an employer to make, adopt, or enforce any rule, regulation, or policy: (a) Forbidding or preventing employees from engaging or participating in politics or from becoming candidates for public office. (b) Controlling or directing, or tending to control or direct the political activities or affiliations of employees. Labor Code Section 1102 makes it unlawful to coerce or influence or attempt to coerce or influence his employees through or by means of threat of discharge or loss of employment to adopt or follow or refrain from adopting or following any particular course or line of political action or political activity.

Retaliating against, or terminating an employee for engaging in political activity may give rise to wrongful termination or retaliation claims. For example, in one California case, a newspaper editor who was fired for publicly criticizing public official outside the workplace was held to have valid wrongful termination claim.

But California law does not prohibit employers from limiting political activity inside the workplace while on the clock. After all, employees are paid to do their job, and typically political activity or discussions are not part of the job description. The two employees arguing about Obama and McCain instead of answering phones, taking sales orders, or doing whatever they are paid to do can be told to knock it off and get back to work. Neutral policies limiting political campaigning or other political activity in the workplace may be necessary in order to keep employees productive. Policies or practices that are not neutral (for example, a conduct code giving preference to one political view over another) should be avoided. Moreover, policies that limit union activity (which is in some sense political) may run afoul of state and federal law.

Please let me know what your experiences with politics in the workplace have been. You can email me by clicking my name below.

Some companies are facing tough choices during the current economic downturn. Layoffs may allow the company to survive. But when the economy rebounds, those laid off workers may not be available for rehire. Hiring and training a new workforce is time consuming and expensive.

The California Employment Development Department (EDD) offers a program that may make sense for some employers.

The EDD offers what it calls a “Work Sharing Unemployment Insurance program.” The program allows eligible employers to reduce hours of workers, and offers the employees partial unemployment benefits.

For example, if a business with 100 employees faces a temporary setback and could file a Work Sharing plan with EDD reducing the work week of all employees from five days to four days (a 20 percent reduction). The employees would be eligible to receive 20 percent of their weekly unemployment insurance benefits.

Says the EDD in a publication on the program: “Under this plan everyone benefits. The employer is able to keep a trained work force intact during a temporary setback and no employees lose their jobs.”

The catch of course is that the employer takes a hit on its EDD reserve account, which in turn would lead to higher employer contribution rates to make up for the depletion. That is, payroll taxes will increase. Of course, some increase may occur in a straight layoff too. Also consider that an employer may risk offending its entire workforce in an across the board reduction of hours, rather than offending only those who would receive the pink slip in a straight layoff.

A. Any employer who has a reduction in production, services or other condition that causes the employer to seek an alternative to layoffs. The Work Sharing plan requires the participation of at least two employees, a minimum reduction of 10 percent of the regular permanent work force or work unit(s), and a minimum reduction of 10 percent of the wages earned and hours worked of participating employees.

Q. Who may not participate in the Work Sharing program?

A. Leased or temporary service employees may not participate.

Q. How does an employer apply for the Work Sharing program?

A. Employers must either call or write EDD’s Special Claims Office to request a Work Sharing Plan Application.

Q. How do employees qualify for the Work Sharing program?

A. To qualify for the Work Sharing program an employee must meet the following requirements for each Work Sharing week:

1. The employee must be regularly employed by an employer whose Work Sharing Plan Application has been approved by EDD.

2. The employee must have qualifying wages in the base quarters used to establish a regular California unemployment insurance claim.

3. The reduction in each participating employee’s hours and wages must be at least 10 percent.

4. The employee must have completed a normal work week (with no hour or wage reductions) prior to participating in Work Sharing.

Q. How much lead time is required to initiate a plan for participation in the Work Sharing program?

A. All Work Sharing plans begin on a Sunday. The earliest a plan may begin is the Sunday prior to the employer’s first contact date withEDD. If the Work Sharing Plan Application is submitted timely, the employer chooses the effective date. To be considered timely a DE 8686 must be submitted within 28 days of the employer’s first contact date with EDD.

Q. Can an employer with multiple locations have more than one Work Sharing plan?

A. No. Only one Work Sharing plan is approved for one California employer account number. However, units at the same or different locations may be included in the Work Sharing plan.

Q. When Work Sharing is no longer necessary, how does an employer cancel the Work Sharing plan?

A. Discontinue issuing the Work Sharing Certifications to participating employees. The Work Sharing plan will expire six months after the effective date without any further action from the Work Sharing employer.

Q. How many subsequent Work Sharing plans can an employer receive?

A. Subsequent Work Sharing plans will be approved provided the employer meets the requirements of the program. Each Work Sharing plan is effective for six months and subsequent plans may be approved until the employer’s economic conditions improve.

Q. Are Work Sharing participants required to serve a one week waiting period like regular unemployment insurance claimants?

A. Yes, like regular unemployment insurance claimants, Work Sharing participants must serve a one week unpaid waiting period. Usually the waiting period is the first week claimed after the initial claim is filed. Even though the waiting period is an unpaid week, all the eligibility requirements for the Work Sharing program must be met.

California has banned text messaging while driving, and employers need to respond promptly by updating policies.

SB 28, signed by Governor Schwarzenegger on September 24, 2008, amends the California Vehicle Code to state: “A person shall not drive a motor vehicle while using an electronic wireless communications device to write, send, or read a text-based communication.”

As the governor sorted through 800 bills on his desk, he said he was “happy” to sign this one. “Banning electronic text messaging while driving will keep drivers’ hands on the wheel and their eyes on the road, making our roadways a safer place for all Californians.”

What about fumbling with your PDA’s phone directory to dial out a call? That doesn’t count as texting under the new law: “For purposes of this section, a person shall not be deemed to be writing, reading, or sending a text-based communication if the person reads, selects, or enters a telephone number or name in an electronic wireless communications device for the purpose of making or receiving a telephone call.”

The penalty for violating the law is $20 for the first violation and $50 for subsequent violations. No violation points will be given as a result of the offense.

The new law closes a loophole left by Senate Bill 1613. Effective July 1, 2008, that new law provides that it is illegal to drive a motor vehicle while using a wireless telephone, unless a hands-free device for the cell phone is used. But the law did not expressly ban texting. (Separate legislation has already banned drivers under age 18 from using cell phones or any texting device while driving.)

California joins Alaska, Minnesota, New Jersey, Louisiana, Washington and the District of Columbia, where legislators have also recently enacted laws that ban sending text messages while driving. At least a dozen other states are currently considering such a ban.

Texting while driving is a frighteningly common occurrence, especially among younger drivers. According to a survey conducted by Findlaw.com, 47 percent of drivers between the ages of 18 and 24, and more than a quarter (27 percent) of drivers 25 to 34, admit to texting while behind the wheel. Seventeen percent of adults surveyed say they have texted while driving.

Studies suggest that texting while driving is more dangerous than driving while under the influence of alcohol or drugs.

The California Highway Patrol reports that statewide last year, 1,091 crashes with 447 injuries were blamed on drivers using cell phones. In accident cases, lawyers may argue that an employer is liable where an off-duty employee makes or answers a business-related call, or sends a business text message while driving.

Have you updated your employee handbooks? In order to minimize liability issues arising from employees using cell phones, PDAs, or other electronic communication devices on the road while in the course and scope of employment or while taking work-related calls, employers should implement a policy that requires all employees to refrain from texting and to use “hands free” devices while driving on company business or when making business calls on the road. Better yet, employees could be prohibited from using cell phones or PDAs while driving.

The U.S. House of Representatives passed legislation on Wednesday significantly amending the federal Americans with Disabilities Act.

The House vote follows the recent approval in the Senate. The bill will now go to President Bush. He is expected to sign the legislation.

Proponents of the bill have argued that U.S. Supreme Court decisions in the last decade have eroded rights of disabled workers.

As quoted in a House of Representatives press release: “The Americans with Disabilities Act guaranteed that workers with disabilities would be judged on their merits and not on an employer’s prejudices. But, court rulings since the law’s enactment have dramatically limited the ability of people with disabilities to seek justice under the law,” said Rep. George Miller (D-CA), chairman of the House Education and Labor Committee. “Today we make it absolutely clear that the Americans with Disabilities Act protects anyone who faces discrimination on the basis of a disability.”

Some of the more significant changes:

<u>Expanded Definition of Major Life Activities</u>

A disability is a physical or mental condition that substantially limits a “major life activity.” The ADA currently does not include a definition of “major life activities.” The EEOC regulations provide examples, and these are incorporated into the ADA by the amendment: “caring for oneself, performing manual tasks, seeing, hearing, eating, sleeping, walking, standing, lifting, bending, speaking, breathing, learning, reading, concentrating, thinking, communicating, and working.” Most courts have followed the EEOC regulations and therefore this part of the amendment does not represent a major change.

However, the amendment adds “major bodily functions” such as “functions of the immune system, normal cell growth, digestive, bowel, bladder, neurological, brain, respiratory, circulatory, endocrine, and reproductive functions.” This could lead to a substantial expansion of workers considered disabled under federal law, as it could potentially include conditions such as high blood pressure, asthma, and other conditions not traditionally viewed as disabilities.

<u>Disregard of Mitigating Measures</u>

U.S. Supreme Court decisions have held that mitigating measures, such as prosthetic devices, should be taken into account when determining whether the workers are disabled. For example, Sutton v. United Airlines, Inc., 527 U.S. 471 (1999), involved myopic twin sisters who were rejected for employment by an airline because of their poor vision, although their vision was correctable with prescription lenses. The airline’s policy required “uncorrected visual acuity” at a certain level, which the sisters did not have. The Supreme Court held that because the sisters’ vision was correctable, they did not satisfy the ADA definition of “disability” and therefore could not make out a claim for discrimination.

The ADA amendment rejects the Supreme Court’s interpretation of the ADA. Now, a worker may qualify as disabled under the ADA without regard to corrective measures such as medication, equipment, or appliances, low-vision devices (which do not include ordinary eyeglasses or contact lenses), prosthetics including limbs and devices, hearing aids and cochlear implants or other implantable hearing devices, mobility devices, or oxygen therapy equipment and supplies; use of assistive technology; reasonable accommodations or auxiliary aids or services; or learned behavioral or adaptive neurological modifications.

<u>Inclusion of Condition in Remission</u>

The amendment expands the definition of disability include a condition that is in remission or that is episodic, if it would substantially limit a major life activity when active.

<u>“Substantially Limits” Liberalized</u>

A disability must “substantially limit” a major life activity. The Supreme Court and the EEOC has set a high standard for “substantially limits.” An individual must have an impairment that prevents or severely restricts the individual from doing activities that are of central importance to most people’s daily lives. The ADA amendment rejects this standard.

But the amendment creates a definitional vacuum. The amendment does not provide an alternative definition. It merely states that the existing definition is invalid, and the ADA should be interpreted under a looser standard. Earlier versions of the legislation included a definition, but the definition was deleted as a compromise in order to pass the bill.

<u>“Regarded As” Restricted</u>

The ADA protects workers who, while not actually disabled, are regarded as disabled by the employer. The amendment excludes from “regarded as” claims minor/transitory conditions lasting six months or less.

It will be some time before the effects of the ADA amendment can be gauged. Undoubtedly, there will be a period of uncertainty while employers seek to comply with the new standards. An increase in federal disability law litigation is inevitable. The EEOC may issue new regulations or guides, which may help employers comply with the new standards.

In some states, a more liberal definition of disability is already in place. For example, the law in California, under the Fair Employment and Housing Act, already includes many of the provisions found in the ADA amendment.

Employers should continue to monitor developments in ADA law and look for compliance advice in the coming months before the law becomes effective on January 1, 2009.

What happens when an employee with a mental disability misbehaves in the workplace? If the mental disability causes the employee to misbehave and violate workplace conduct rules, can the employer discipline the employee?

An EEOC press release acknowledges that employers struggle greatly with the ADA’s vague proscriptions and mandates. “The EEOC continues to receive numerous questions on these topics from employers and from individuals with disabilities, indicating that there is still a high level of uncertainty about how the ADA affects these fundamental personnel issues. This document will serve a critical need and enhance compliance with the ADA.”

According to the new guide, the ADA permits employers to apply the same performance standards to all employees, including those with disabilities, and emphasizes that the ADA does not affect an employer’s right to hold all employees to basic conduct standards, notes the press release. “At the same time,” cautions the EEOC, “employers must make reasonable accommodations that enable individuals with disabilities to meet performance and conduct standards.”

For example, the EEOC provides the following hypothetical example:

Steve, a new bank teller, barks, shouts, utters nonsensical phrases, and makes other noises that are so loud and frequent that they distract other tellers and cause them to make errors in their work. Customers also hear Steve’s vocal tics, and several of them speak to Donna, the bank manager. Donna discusses the issue with Steve and he explains that he has Tourette Syndrome, a neurological disorder characterized by involuntary, rapid, sudden movements or vocalizations that occur repeatedly. Steve explains that while he could control the tics sufficiently during the job interview, he cannot control them throughout the work day; nor can he modulate his voice to speak more softly when these tics occur. Donna lets Steve continue working for another two weeks, but she receives more complaints from customers and other tellers who, working in close proximity to Steve, continue to have difficulty processing transactions. Although Steve is able to perform his basic bank teller accounting duties, Donna terminates Steve because his behavior is not compatible with performing the essential function of serving customers and his vocal tics are unduly disruptive to coworkers. Steve’s termination is permissible because it is job-related and consistent with business necessity to require that bank tellers be able to (1) conduct themselves in an appropriate manner when serving customers and (2) refrain from interfering with the ability of coworkers to perform their jobs. Further, because Steve never performed the essential functions of his job satisfactorily, the bank did not have to consider reassigning him as a reasonable accommodation.

Employers addressing day-to-day personnel issues are often left guessing about the ADA’s ill-defined requirements. The EEOC’s guide does a laudable job providing specific examples and straightforward answers to questions. The explanation and examples regarding disciplining ADA employees are particularly helpful.

Other topics addressed include issues related to attendance, dress codes, and drug and alcohol use, and the circumstances in which employers can ask questions about an employee’s disability when performance or conduct problems occur.

Employers should carefully study the EEOC’s new publication. However, keep in mind that the courts have the final say on the ADA, and the judiciary is not bound to follow the EEOC’s guidance. For example, in Gambini v. Total Renal Care, Inc. dba DaVita, 486 F.3d 1087 (Wash. 2007), an employee was terminated for making violent outbursts at work. She claimed that it was caused by her bipolar disorder. The Ninth Circuit reversed a lower court decision, finding that the outbursts were protected ADA conduct. For more details on this case, click here.

The bill died in the Senate because of budget constraints, noted Dean Calbreath, a San Diego Union Tribune columnist in a recent article. “The Schwarzenegger administration opposed the bill on the grounds that it would add costs to the state budget. The Department of Finance estimated that paying for the sick leave would add $600,000 to the budget, because the state would have to pay for sick leave for nurses who provide health care to elderly, blind and disabled patients in their homes.”

The cost to private employers would be much more. Although many employers offer sick pay as a benefit, most employers bristle at the thought of a state mandate requiring such pay. In a letter to the California Senate Appropriations Committee, the Cal Chamber of commerce wrote: “The ever-increasing burden of costly mandates on employers can cumulatively result in lower wages, reducing available health insurance, limiting training programs and - in the worst case scenario- job loss or reduced work hours. Job loss translates to lower tax revenues from employers and employees, as well as increased utilization of Unemployment Insurance. In an already troubled economy California should be seeking ways to stimulate job growth and avoid forcing costly mandates on employers.”

Supporters of the bill came up with all manner of public policy arguments. The pro-labor group Labor Project for Working Families argued in a fact sheet that employers should support the sick pay mandate because it would decrease employee turnover, increase productivity, and improve public health.

The public health argument appeared to strike a chord with voters. The argument is that sick workers make more people sick. Korye Capozza, of the UC Berkeley Center for Labor Research and Education hypothesized in a policy brief that mandatory sick pay would improve decrease food poisoning and save the elderly. “AB 2716 would have clear benefits for individual workers but, importantly, it would also have public health benefits that extend beyond the household and workplace” wrote Capozza. “Specifically, such a policy could reduce the transmission of foodborne illness, decrease disease outbreaks in nursing homes, reduce the spread of infections in childcare settings and mitigate the transmission of seasonal influenza. There is also some evidence that paid sick leave influences workers’ decisions to see a doctor, parents’ decisions to stay home and care for a sick child and patients’ decisions about treatment choices. Finally, AB 2716 has the potential to improve patient compliance with preventive health-care guidelines and chronic care management, and thus to reduce health-care spending over the long term.”

Mandatory sick pay will be back. Assemblywoman Ma has vowed to reintroduce the bill next year. It is likely to gain public support. The California Center for Research on Women and Families, a program of the nonprofit Public Health Institute, publicized a public poll finding 73% of voters would support a law to guarantee that workers receive a minimum number of paid sick days from their employer.

Similarly, the poll found that 81% agree (57% strongly) that guaranteeing paid sick day laws to all restaurant workers who handle food would increase the chances that these workers would stay home when they get sick and not infect the public. Another 76% agree (50% strongly) that paid sick days should be considered a basic worker right, like being paid a decent wage.

The Department of Labor has released a new opinion letter in which it examines a restaurateur’s policy specifying employee shoes. The questions posed are: (1) Are the shoes part of a uniform, such that the employer must pay for them? (2) May the employer arrange for the purchase of the shoes and deduct the cost from the employee’s pay?

The DOL considered the following facts:

The Employer operates restaurants and requires employees to wear “dark-colored” shoes without prescribing any particular quality, brand, style, model, or type. Aside from color, the only other requirements are that they not be open-toed and that, for safety reasons, they not have a slippery sole. Employees may wear shoes they already own when hired or may purchase shoes from any vendor they may choose. Employees are free to wear the shoes outside of work.

The Employer has arranged a program through which employees may, solely at their option, purchase shoes from a shoe manufacturer. The manufacturer offers over 60 different slip-resistant shoes in a broad spectrum of styles and in numerous dark colors. If an employee chooses to purchase shoes from this vendor, the employee may either pay the vendor directly or the Employer will pay the vendor and deduct the amount of the payment from the employee’s paycheck over a number of weeks. In some instances, the deductions may cause the remaining amount of the employee’s paycheck to fall below the minimum wage for each hour worked during that pay period. If the employee requests that the Employer pay for the shoes through a deduction, the employee must do so by submitting a request in writing describing the shoes to be purchased, requesting the Employer pay for the shoes, and authorizing the Employer to withhold future wages in an amount sufficient to reimburse the purchase costs. Neither the Employer, nor any person acting in its interests, realizes any profit or other benefit from the purchase program,

The DOL opined that the footwear was not a uniform. Quoting its Field Operations Handbook the opinion letter states: “If an employer merely prescribes a general type of ordinary basic street clothing to be worn while working and permits variations in details of dress, the garments chosen by the employees would not be considered to be uniforms.” More restrictive policies may lead to the opposite conclusion. “[W]here the employer does prescribe a specific type and style of clothing to be worn at work, e.g. where a restaurant or hotel requires a tuxedo or a skirt and blouse or jacket of a specific or distinctive style, color, or quality, such clothing would be considered uniforms.”

The DOL also examined whether the Employer may offer to advance the money necessary for employees to voluntarily purchase shoes from the shoe manufacturer and recoup the advance through payroll deductions where those deductions may cause the employee’s paycheck to fall below the minimum wage for each hour worked in the pay period.

The DOL determined that such a practice was acceptable under the FLSA. The FLSA includes as part of “wages” the “reasonable cost” to the employer for furnishing any employee with board, lodging or other facilities. The DOL opined that the shoes qualified as “other facilities.” “[A] deduction for the actual cost of the shoes is allowed under [the FLSA], even if it reduces the amount of the employee’s cash wages below the minimum wage, so long as the employer does not profit or include any administrative costs.”

The DOL letter notes that the rule would be no different for tipped employees.

On June 23rd the Internal Revenue Service announced an increase in the standard mileage rates for the final six months of 2008.

The rate will increase to 58.5 cents a mile for all business miles driven from July 1, 2008, through Dec. 31, 2008. This is an increase of eight (8) cents from the 50.5 cent rate in effect for the first six months of 2008.

The IRS announced the unusual mid-year increase in recognition of recent gasoline price increases. The IRS normally updates the mileage rates once a year in the fall for the next calendar year.

“Rising gas prices are having a major impact on individual Americans. Given the increase in prices, the IRS is adjusting the standard mileage rates to better reflect the real cost of operating an automobile,” said IRS Commissioner Doug Shulman. “We want the reimbursement rate to be fair to taxpayers.”

While gasoline is a significant factor in the mileage figure, other items enter into the calculation of mileage rates, such as depreciation and insurance and other fixed and variable costs.

The optional business standard mileage rate is used to compute the deductible costs of operating an automobile for business use in lieu of tracking actual costs. This rate is also used as a benchmark by the federal government and many businesses to reimburse their employees for mileage.

Employers should consider increasing the reimbursement rates to match the new IRS rate. Generally, employers must reimburse employees for travel expenses incurred in the course of work. For example, in California, Labor Code section 2802, subdivision (a), requires an employer to indemnify its employees for expenses they necessarily incur in the discharge of their duties. Note that in California, paying the IRS rate does not guarantee that the employer has fully reimbursed the employee for actual travel expenses. The California Supreme Court recently addressed employee travel expense reimbursement in a case titled Gattuso v. Harte-Hanks Shopper, Inc.